In a matter of weeks, we’ve seen an unprecedented upending of businesses and the economy due to coronavirus (COVID-19). Many companies including our clients are having emergency Zoom meetings with their leadership, Board,and investors to understand what impact on their business will this have.Economists are predicting that this will drive the market into a recession that will most certainly take significant time to recovery. It’s clear that await-and-see approach won’t be acceptable in this unparalleled situation - now is the time for action and to prepare for what’s coming.
In downturns, there are key steps that a company can take to prepare – data can help inform each of those steps:
1. Cash & Liquidity Scenario Planning –Create the Worst Case Scenario
Outline specific impacts and extreme downside scenarios that could potentially change the trajectory of your P&L and more importantly your cash flow.
- What’s your key metrics and executive dashboard tell you? What if each of those metrics declined significantly – could you survive?
- Do you have a good and accurate view into the granular input data into your scenarios? How do you get the most accurate data in an uncomfortably short amount of time?
- How can you incorporate data from each department(marketing, operations, supply chain, finance, etc) to really stress-test the scenarios?
2. Revenue Retention – Focus on Your Best Customers
Your product or service is valuable to your current clients – how do you focus your efforts on keeping their valuable dollars?
- Who are your most loyal customers? Not just in terms of revenue but how can you measure their stickiness with data?
i. What’s their most recent NPS score for you?
ii. Have they called into support with complaints in the last 3 months? How many times? What was their rating for that interaction?
iii. Are they in industries that show the best retention for your product/service?
iv. What’s their utilization data look like in the past 3 months? Have they already stopped using your product/service but haven’t told you?
v. How often do they purchase? Are they delaying purchases when they usually order every X weeks?
3. Stabilize Operations – Assure that You Can Still Deliver
Even if you manage to keep your customers –it will be all for naught if you can’t deliver your goods and services.
- Is average lead time data increasing for certain vendors more than others?
- Are your Vendors’ On-time rate decreasing dramatically?
- Are product delivery times slipping because employees are impacted by COVID19 personally?
- Are certain geographies impacted more than others? Can you shift vendors or teams to address the most impacted regions?
4. Become Efficient – Cut Unnecessary Costs
In this unprecedented rise in business, we’ve become immune to cost cutting but in times like these its necessary to know what costs should go first.
- Marketing is easy to cut but can you cut enough just by cutting the inefficient marketing spend? What’s your LTV/CAC by channel? Does your marketing attribution model inform how channels interrelate thus may be still efficient?
- What’s the employee performance and productivity data tell you, so you make the most informed layoff (if necessary)?
- What processes take up the most worker hours? How can you automate manual processes happening throughout the business to supplement cost cutting measures?
5. Recovery is Certain but Will Take Time - Plan for the Future
After all the stress of the downturn – many folks forget to create a plan for the recovery.
- Where do you see the most opportunity in the industries you serve? Are there certain industries that you believe will recover faster? What marketing and sales channels have those customers come from historically?
- Are there M&A opportunities that you can look for? How do you assure you do the right diligence on key data of the target?
- What do your metrics look like in this new reality?
At Nuview, we have had the unfortunate opportunity to help clients through tough situations and have answered each one of these sub questions through data. One thing we know is that data makes decisions in uncertain times more palatable. As important as the data, we’ve seen that the perseverance of teams through great leadership is what allows teams to survive and even thrive in these situations. To those teams, we tip our hat and we say:we’re here to accelerate your insights at the most critical times.